|S. Africa's Nogxina Says 26% Black Mine Ownership Is a 'Base'
The requirement that South African mines be at least 26 percent black-owned by 2014 is a "base" and the proportion will need to be higher to "deracialize" the industry, the director general of the national mining department said.
South Africa's government is pressuring companies to increase black participation in the economy to help make up for apartheid when the country's black majority was largely prevented from owning assets in Africa's largest economy. By law mining companies operating in the country should have sold 15 percent of their assets to black investors by 2009 and must be at a minimum of 26 percent by 2014.
"That 26 percent was not the maximum, it was the minimum," Sandile Nogxina, director general of the Department of Mineral Resources, said in an interview near the central town of Winterton yesterday. "That was the base."
South Africa is the world's biggest producer of platinum, ferrochrome, manganese and vanadium and is the largest producer of gold in Africa. Mining companies including London-based Anglo American Plc, BHP Billiton Ltd., Xstrata Plc, Anglo Platinum Ltd. and Impala Platinum Holdings Ltd. have assets in the country.
"You cannot say that you're satisfied unless and until the South African mining industry is totally reflective of the South African demographics," Nogxina said. "The intention is to ultimately to deracialize the South African mining industry."While one in 10 South Africans is white members of other races were prevented from voting during apartheid, which ended in 1994, and whites still dominate the economy.
New equity targets won't be introduced when the charter is revised by the end of June because they would "unnerve" investors and companies yet to attain that level, Nogxina said. He wouldn't say what levels may be set in the future.
In neighboring Zimbabwe President Robert Mugabe this year signed into law a requirement that mines be 51 percent black- owned.
"Its very difficult to interpret these things," Steve Minnaar, who helps manage about 33 billion rand ($4.6 billion) at Cape Town's Abax Investments Ltd., said in an interview. "I'd be surprised if they suddenly tomorrow announce its 51 percent. These guys are not deaf to the influence it would have on the market and investments."